Polyacrylonitrile (PAN)-based carbon fibers have high specific strength, elastic modulus, thermal resistance, and thermal conductivity. Due to these properties, they have been increasingly widely used in various spheres including leisure, aviation, aerospace, military, and energy applications. However, if exposed to air at high temperatures, they are oxidized, thus weakening the properties of carbon fibers and carbon composite materials. As such, it is important to understand the oxidation reactions of carbon fibers, which are often used as a reinforcement for composite materials. PAN-based carbon fibers T300 and T700 were isothermally oxidized in air, and microstructural changes caused by oxidation reactions were examined. The results showed a decrease in the rate of oxidation with increasing burn-off for both T300 and T700 fibers. The rate of oxidation of T300 fibers was two times faster than that of T700 fibers. The diameter of T700 fibers decreased linearly with increasing burn-off. The diameter of T300 also decreased with increasing burn-off but at slower rates over time. Cross-sectional observations after oxidation reactions revealed hollow cores in the longitudinal direction for both T300 and T700 fibers. The formation of hollow cores after oxidation can be traced to differences in the fabrication process such as the starting material and final heat treatment temperature.